CASE UPDATE: FOURTH CIRCUIT FINDS LOWER COURT’S INTERPRETATION OF ARBITRATION AWARD INSUFFICIENT
On June 20, 2006 we reported on a decision of a US District Court decision declaring the relationship between two arbitration awards. The Fourth Circuit has reversed that decision. The district court was asked to determine whether an arbitration panel’s second award was intended to supplement or incorporate the first award. After receiving yes/no responses from two of the three arbitrators, the district court concluded that the first award had been factored into and setoff by the second.
The Fourth Circuit reversed and remanded, concluding that while the district court correctly concluded that the second arbitration award was ambiguous and correctly sought clarification from the arbitrators, the procedure employed by the district court to clarify the ambiguity was unsuccessful. The court was “unable to discern, without further discovery into the arbitrators’ intent, how the one-word response from two of the arbitrators resolved the ambiguity.” The Burlington Insurance Company v. Trygg-Hansa Ins. Co., No. 06-2082 (USCA 4th Cir., Jan. 17, 2008).
This post written by Lynn Hawkins.
